The Perils of Tinkering with Social Services

With a single speech at an economic summit in Switzerland this week, the Prime Minister has whipped up a media storm across Canada. Addressing global leaders at the World Economic Forum, Mr. Harper suggested that his government was preparing to initiate sweeping and controversial reforms to, among other things, the regulation system for retirement benefits. Although the possible changes to retirement/pension funding have elicited the biggest reaction, other potential changes to Canada’s immigration system and the wider economic consequences of these issues need to be examined together.

As of yet, nobody is really sure what the government’s next steps will be. Stephen Harper has worked long and hard to establish his Conservative party as the keepers of the Canadian economy. After finally achieving his long-coveted majority in 2011, Harper certainly has some political wiggle room. The main opposition parties are still in shambles, both lacking a permanent leader, and struggling to establish their own narratives against the Conservatives’ legislative juggernaut. The population has been generally, if reticently, supportive of the Mr. Harper’s economic management and policies. Although there would likely be no better time in his mandate to tackle potentially unpopular issues, retirement and immigration are always two of the biggest potential minefields in Canadian politics.

Canadians of all ages and dispositions trend towards a liberal worldview when it comes to social services. New Canadians and young people who work hard expect to be treated the same way as those who retire before them. Those expectations, to end work at a reasonable age and be able to live comfortably, with access to reliable healthcare and other services, are prominent factors in keeping this block of voters happy and supportive. A government that jeopardizes those expectations risks a massive blowback. Indeed, historically, such tinkering has not gone over well. When Brian Mulroney proposed to de-index pensions in 1985, the backlash was severe. The government recovered enough to win re-election, but not without shelving its plans. Similarly, the Liberals of 1995 wanted to alter the pension system as part of their economic reforms but were shot down by Prime Minister Chrétien to prevent political risks.

Older Canadians have consistently supported Stephen Harper in large numbers. His party’s constant message of stability and consistency resonates with their demographic; and up until now, they have been rewarded. Similarly, the suggestion that there could be changes in who is allowed to immigrate to Canada will shake the increasingly powerful and voter-rich ridings, flush with increasingly affluent new Canadians, that the Conservatives successfully courted in their quest for a majority.

The bulk of his policies thus far have benefited older, new and upper-middle-class Canadians, and have been opposed principally by much younger demographics (the groups that tend to support the Liberals and New Democrats). That he is now considering tinkering with policies his bedrock voter base hold dear has been labeled by some as a potential turning point for the Conservatives—maybe even political suicide.

It is important to note, however, that there is truth to certain elements of what the government wants to address. By virtue of their needs, older individuals use a greater share of social services. As our population’s average age increases, programs like retirement benefits and healthcare will become increasingly stressed. As more people immigrate and become Canadians, the number of years they contribute to the work force before retiring and accessing benefits also becomes a factor. By encouraging people to work even a bit longer, the government stands to realize cost decreases in the billions.

Indeed, to prevent destabilization of certain segments of the Canadian economy, reforms of some sort will be needed, whether now or down the road. However, how the government chooses to go about these changes, whom they affect, and how sudden or severe they are will all impact how the population perceives them. For many, it hardly seems fair to work hard and prepare for retirement only to have the goal posts moved as they near the finish.

Until the Tories make their intentions clear, particularly through the budget due in March, guessing at Mr. Harper’s real plans is only speculation. Whatever happens, he must tread carefully: until now, despite opposition from certain segments, he has managed to maintain a tense but stable coalition of voters across the country to stay in power. This plan, borne of ideology rather than a desire for political gain, is fraught with risk. If he fumbles on this, his plan to make the Conservatives Canada’s new “natural governing party” may unravel before his eyes.

Leave a Reply

  • (will not be published)

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>